Residential Heat Pump
Photo Credit: Nancy Pauwels for Shutterstock

U.K. Government Grants £1.77 Million to Support Natural Refrigerant Heat Pump Innovation

The funding will go to three residential heat pump development projects under its Heat Pump Ready initiative.

The U.K. government has announced £1.77 million (€2.06 million/$2.22 million) in funding for three natural refrigerant-based heat pump projects under its Heat Pump Ready initiative.

The Flexible Heat Pump from Clear Blue Energy, Natural Heat from FeTu and Cube X from Mixergy were the natural refrigerant projects funded. The grants are part of a larger £5.3 million (€6.2 million/$6.6 million) investment in heat pump R&D, which is split across nine projects.

According to the U.K. Department for Business, Energy and Industrial Strategy (BEIS) and Department for Energy Security and Net Zero (DESNZ), the funding is designed to support efforts to reduce the lifetime cost of residential heat pumps and improve consumer perception and experience through the development of technologies, tools and business models.

One of the main objectives of the program is to develop solutions that help position heat pumps as the technology of choice for British consumers, particularly in “distress purchase situations,” when a new domestic heating system is required urgently.

Another focus is to develop energy- and cost-efficient solutions that use low-GWP (<150) refrigerants. With 20-year GWPs of 1 or below, natural refrigerants like CO2 (R744) and propane (R290) offer future-proof options for heat pump technologies.

The nine projects were selected following an application process that began in October 2023. Up to £10 million (€11.6 million/$12.5 million) was available for allocation.

The recipients

Clear Blue Energy has received a grant of £773,156 (€899,543/$971,288) to develop a prototype of its R290 Flexible Heat Pump in partnership with Sourcethermal, the University of Liverpool and Pragmatic Energy. The air-source unit provides both space heating and domestic hot water, with the ability to efficiently deliver high temperature lift, Adrian Richardson, Director of Clear Blue Energy, told

“[The] initial focus is on a range of residential applications and output capacities,” he said. “We expect the incremental benefit over conventional heat pumps will be higher in larger capacities, so will also look at industrial and commercial applications of our technology in due course.”

According to the collaborative, the Flexible Heat Pump outperforms conventional heat pump technologies with a “higher cycle efficiency” due to the inclusion of a heat storage device that can recover, store and reuse part of the sensible heat carried by the hot liquid refrigerant from the condenser. In addition to acting as a secondary heat source and enabling more efficient defrost cycles, this technology boosts system COP to “significantly lower running costs.”

“We expect the incremental benefit over conventional heat pumps will be higher in larger capacities, so will also look at industrial and commercial applications of our technology in due course.”

Adrian Richardson, Clear Blue Energy

FeTu has received £465,763 (€541,901/$585,121) for the development of its natural refrigerant-based heat pump, Natural Heat. While the refrigerant used is not specified, the company does have experience in CO2-based refrigeration and heat pump applications. has contacted FeTu for clarification.

The unit will use FeTu’s novel compressor, which offers high levels of volumetric and thermal efficiency. The funding will support the company’s design, manufacturing, assembly and testing efforts over the coming year.

Mixergy and Harlequin Manufacturing have been awarded £530,080 (€616,732/$665,920) for their CubeX heat pump. Mixergy has not specified the refrigerant used in its CubeX heat pump; however the company does produce an R290-based integrated heat pump cylinder for hot water production. has contacted Mixergy for clarification.

According to the manufacturers, the CubeX unit can provide space heating and hot water and is designed for smaller homes and apartments, offering high performance at a reduced footprint.

Heat pump ready

This is the second wave of funding to be granted under the Heat Pump Ready initiative’s efforts to optimize heat pump development – also known as Stream 2. The first wave of funding – £15 million (€17.4 million/$18.7 million) – was awarded to 24 projects in September 2022. Of those, the Highly Flexible Storage Heat Pump from Kensa Heat Pumps is the only one to use a natural refrigerant, with the company saying its outdoor heat pump uses a “natural refrigerant … that requires a high level of venting.”

Another 11 projects have received funding from the initiative to focus on the deployment of high-density heat pump projects.

The Heat Pump Ready initiative is a £60 million (€69.7 million/$79.1 million) aid scheme program funded by the DESNZ as part of its Net Zero Innovation Portfolio and aims to accelerate the adoption of residential heat pumps in the U.K.

Similar efforts have been seen in various regions over recent months. In February, the U.S. Department of Energy announced a second tranche of funding to accelerate the domestic production of residential heat pumps, hot water heaters and related systems and components. The European Commission recently approved a €350 million ($379 million/£301 million) aid scheme for Portugal that will provide funding to companies producing equipment “necessary to foster the transition toward a net-zero economy,” which includes heat pumps and heat pump components.

Boiler Upgrade Scheme

To stimulate the demand side of the U.K. heat pump market, the government is offering grants to consumers in England and Wales to cover part of the cost of replacing fossil fuel-based heating systems with heat pumps.

The Boiler Upgrade Scheme (BUS), which was launched in May 2022 and runs until the end of 2027, provides consumers up to £7,500 (€8,713/$9,378) off the cost and installation of an air- or ground-source heat pump.

In October 2023, the government announced it was increasing the BUS grant amount by 50% – up from £5,000 (€5,809/$6,263) – to support accelerated adoption. It has since seen a significant uptick in the number of grant applications, with more than 2,000 applications submitted per month.

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